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Monday, January 3, 2011

It looks like a large structure is being completed in silver prices as well. Potentially a large "B" wave structure from early 1990 is in it's latter stages. Here is a monthly chart of silver:

Click on the chart to make the image bigger.

Silver is now very overbought on the technical indicators, and very extended over it's 200 day moving average. The large "B" wave structure is divided into an A, B and C wave of one lessor degree also marked in blue colours where the "A" and "C" wave each consist of a 5 wave structure marked in black colour. The last 5th wave which is in progress can extend so it could go even higher. Negative divergence is developing on some of the technical indicators.

If the above count is correct the next major move should be a devasting multi year decline in a large wave "C".

The above is an extract of our latest investment newsletter. See more about the financial markets in our just published ElliottWaveTechnician December 2010 Investment Newsletter.